Disney profit drops as film spending and TV issues mount

The Walt Disney Company said on Monday that its profit declined in the quarter ended Dec. 27, as higher movie and television costs offset solid revenue growth.

Adjusted earnings per share fell 7% to $1.63, while operating profit dropped 9% to $4.6 billion, results that were weaker year on year but better than analysts had expected, News.Az reports, citing The New York Times.

Revenue rose about 5% over the period.

The decline was driven largely by rising expenses tied to major film releases, including Avatar: Fire and Ash and Tron: Ares, as well as broader challenges across Disney’s television business.

The earnings report comes as Disney’s long-running succession process nears a conclusion. The company’s board is expected to meet in Los Angeles in the coming days to decide who will lead the company when Chief Executive Robert A. Iger retires later this year for the second time.

During the quarter, Disney released nine films, more than double the four released in the same period a year earlier, sharply increasing production and marketing costs. “Avatar: Fire and Ash” alone cost an estimated $500 million to produce and promote. Because the film was released near the end of the quarter, most of its box office revenue will be recorded in the following period. “Tron: Ares” cost at least $320 million and generated only $142 million in ticket sales.

Disney’s television unit was also hit by distribution and advertising challenges. Around 10 million YouTube TV subscribers temporarily lost access to ESPN, ABC and other Disney-owned channels for 15 days during the quarter after contract-renewal talks with Google collapsed. Disney said the dispute reduced operating income by $110 million. Lower political advertising in the United States and the 2024 spinoff of television assets in India further weighed on results.

There were, however, several bright spots. Operating profit from streaming services Disney+ and Hulu rose 72% to $450 million, helped in part by higher subscription prices.

Disney’s Experiences division also posted solid growth. The company’s cruise business performed strongly, contributing to an 8% increase in operating profit in the segment. Attendance at Disney’s U.S. theme parks rose 1%, while spending per visitor increased 4%, reflecting higher sales of merchandise and food and beverages.

“Overall, we certainly felt great about the quarter,” Disney Chief Financial Officer Hugh F. Johnston said in an interview.

News.Az 

By Nijat Babayev